The End Of The Petrodollar Is The End Of America’s Global Dominance
Every nation has had to convert its currency to the U.S. dollar, making it the de facto global currency. Thanks to Joe Biden, it’s all gone.Every nation has had to convert its currency to the U.S. dollar, making it the de facto global currency. Thanks to Joe Biden, it’s all gone.A Message To The TikTok Girls Pretending To Be Underwater Welders: Start Appreciating Men
Women physically can’t or, more often, simply won’t do the manual labor jobs that build and sustain our civilization.Biden threatens oil companies with new tax over 'war profiteering.' But top Dem economist says it will backfire.
President Joe Biden threatened oil and gas companies with a "windfall tax" on Monday, accusing them of "war profiteering."
What did Biden say?
Speaking at the White House, Biden accused oil companies of netting "outrageous" profits, which he attributed to the exploitation of the war in Ukraine.
Biden said oil companies need to reinvest their profits and reduce the cost of oil — or else.
"If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions," Biden said. "It’s time for these companies to stop war profiteering, meet their responsibilities to this country, and give the American people a break and still do very well."
The U.S. is not, in fact, at war.
Moreover, Biden claimed that if oil companies were not profiteering, then Americans would be paying, on average, at least 50 cents less per gallon of gas. He did not provide evidence to back that claim.
What was the response?
Larry Summers, the former Treasury secretary who served in the Clinton and Obama administrations, predicted Biden's windfall tax will backfire.
"I’m not sure understand the argument for a windfall profits tax on energy companies. If you reduce profitability, you will discourage investment which is the opposite of our objective," Summers pointed out.
"If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years," he noted.
\u201cIf it is a fairness argument, I don\u2019t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.\u201d— Lawrence H. Summers (@Lawrence H. Summers) 1667297192
As Summers observed, the oil business is highly volatile.
For instance, while Biden emphasizes the industry's current profits, the five biggest oil companies — ExxonMobil, BP, Shell, Chevron, and TotalEnergies – lost $76 billion in 2020. Biden, however, made no mention of that.
Meanwhile, the American Petroleum Institute also pointed out in a response to Biden that the oil industry does not control the price at the pump.
"Oil companies do not set prices—global commodities markets do," API president and CEO Mike Sommers said.
Economists at the Federal Reserve of Dallas have explained why oil companies are not responsible for the high prices of gas at the pump. According to their calculations, less than 60% of the price of gas is directly related to the price of oil. Other costs associated with the price of gas include oil refining, distribution, and taxes.
The truth is that gas stations control the price of gas at the pump.
"Since only 1% of service stations in the U.S. are owned by companies that also produce oil, U.S. oil producers are in no position to control retail gasoline prices," the Dallas Fed explained.
Oil companies fire back at Biden over threatening letter: 'The Administration aims to impose obstacles to our industry'
Oil companies are firing back at President Joe Biden after he sent them a threatening letter that demanded they immediately increase oil production.
What did the letter say?
Biden sent a letter to executives at seven oil production companies — BP, Chevron, Exxon Mobil, Marathon Petroleum, Phillips 66, Shell, and Valero Energy — demanding they increase production.
If they do not comply with his demands, Biden threatened to use "emergency authorities" against them.
"Your companies and others have an opportunity to take immediate actions to increase the supply of gasoline, diesel and other refined product you are producing," he said. "My administration is prepared to use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied."
The president also accused the companies of profiteering during a "time of war." The United States, however, is not at war.
"At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable," Biden said. "There is no question that Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing. But amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain."
What are the companies saying?
Exxon Mobile explained in a statement Wednesday they have been investing in production — to the tune of $50 billion over the last five years.
Importantly, Exxon Mobile also said the government plays a key role in the gas price crisis.
The statement suggested the government's promises to move away from oil and gas are discouraging oil companies from further investments in oil and gas. After all, why would a business pour tens of billions of additional dollars into an industry if that investment will be worth nothing in the near future?
"In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies," the statement said.
"Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines," the statement added.
In a statement provided to TheBlaze, Chevron echoed Exxon Mobile's concerns.
A spokesman for Chevron explained the company hopes the Biden administration's "approach to energy policy will start to better reflect the importance of addressing" record-high gas prices.
"Unfortunately, what we have seen since January 2021 are policies that send a message that the Administration aims to impose obstacles to our industry delivering energy resources the world needs," the statement added.
"As we have said, fuel prices are impacted by many factors that involve far more than one company or even one country. They are fundamentally a question of global supply and demand," the statement continued. "Chevron is doing its part to meet the demand for more oil, planning to increase Permian Basin production by more than 15 percent this year, and our overall U.S. upstream capital investments are up 35% over last year."
A representative for Marathon Petroleum confirmed executives received Biden's letter, but did not elaborate further. BP, Phillips 66, Shell, and Valero Energy did not immediately respond.
Biden unveils new plan to target, punish oil companies for gas crisis he blames on Putin
President Joe Biden is asking Congress to punish oil companies for allegedly placing profits over oil production.
The allegations are the latest development in Biden's total abdication of any responsibility for the gas price crisis. Energy experts say the Biden administration's hostile policies are playing some role in the crisis, but the White House blames Russian President Vladimir Putin and oil companies.
While Russia's invasion of Ukraine undoubtedly shook the oil market, the White House has blamed oil companies for not using as many as 9,000 approved oil leases. White House press secretary Jen Psaki was making that claim before the war.
What are the details?
In an announcement, the White House pushed blame for the gas price crisis on oil companies, claiming they are putting profits over production.
"[T]oo many companies aren’t doing their part and are choosing to make extraordinary profits and without making additional investment to help with supply," the White House said in a statement.
To stop oil companies from their alleged profiteering, Biden wants Congress to impose fees on companies for not using approved leases.
"Today, President Biden is calling on Congress to make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands that they are hoarding without producing," the statement said.
"Companies that are producing from their leased acres and existing wells will not face higher fees," the White House continued. "But companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre."
But what is the problem?
Three significant problems exist with the White House's claims.
First, while the oil industry is highly lucrative, it is also volatile. Although major oil companies measure annual revenue in the tens of billions of dollars, the same measuring standard applies to losses. In fact, the world's biggest integrated oil companies — ExxonMobil, BP, Shell, Chevron, and TotalEnergies — lost more than $70 billion in 2020. That means gains in 2021 essentially offset losses from the previous year.
Second, many oil companies, while making investments in renewable sources, are slowing investments in fossil fuels because the U.S. government is enacting policies that are increasingly hostile toward oil. Why would a company make additional investments in oil, like the White House's statement indicates the Biden administration wants, if U.S. policy makes oil production untenable?
Third, not every approved oil lease is viable. In fact, the process of finding, acquiring, and developing oil under an approved lease is a lengthy one — only if oil exists under the land for which a lease is approved. To make matters worse, leases are often hung up by litigation and bureaucratic red tape.
Anne Bradbury — CEO of the American Exploration & Production Council, a national trade organization that represents oil companies — has called the White House's accusation a "red herring."
"It's really a distraction from the fact that this administration has paused leasing on federal lands, something that we're concerned about and something that we think needs to continue right away," Bradbury told Fox Business. "The fact is that industry is producing at a higher level on existing leases on federal lands than in the last 20 years and these leases take many years to explore, to develop and produce on."
Oil industry debunks Biden admin's narrative meant to deflect from hostile policies as gas prices skyrocket
As gas prices skyrocket, the Biden administration has been blaming oil companies for a lack of domestic production, a narrative that deflects from the administration's policies that are hostile toward fossil fuels.
But representatives for the oil industry say the Biden administration is not being honest.
What has the Biden admin said?
Amid calls for the U.S. to increase domestic oil production, the Biden administration has repeatedly accused oil companies of not using 9,000 already-approved oil leases.
"There are 9,000 approved drilling permits that are not being used," Psaki repeated on Monday. "So the suggestion that we are not allowing companies to drill is inaccurate. The suggestion that that is what is hindering or preventing gas prices to come down is inaccurate."
The claim deflects from the administration's policies hostile toward fossil fuels. Even as gas prices skyrocket to historic highs, the Biden administration is looking internationally — to Venezuela and Saudi Arabia — to supply American oil needs, instead of working to empower domestic producers.
What is the oil industry saying?
Representatives in the oil and gas industry say the Biden administration is being deceptive, citing the lengthy process required to find, acquire, and develop oil once leases are approved — if oil even exists under the land for which a specific lease is approved.
Anne Bradbury — CEO of the American Exploration & Production Council, a national trade organization that represents oil and gas companies — described Psaki's comment as a "red herring."
"That accusation is a complete red herring," Bradbury told Fox Business. "It's really a distraction from the fact that this administration has paused leasing on federal lands, something that we're concerned about and something that we think needs to continue right away. The fact is that industry is producing at a higher level on existing leases on federal lands than in the last 20 years and these leases take many years to explore, to develop and produce on."
Mike Sommers, president and CEO of the American Petroleum Institute, told Fox Business the Biden administration's claim "represents a fundamental misunderstanding as to how this process works."
"Once you lease land there is a whole process that you have to go through. First you have to actually discover whether actually there is oil and gas in that land. Second of all, you have to get a permit to actually develop that land," Sommers said. "Right now we actually are developing more leases than we have in two decades so the White House certainly doesn't have their facts straight on this."
Energy Workforce and Technology Council CEO Leslie Beyer agreed the Biden administration's rhetoric is dishonest because not every approved lease is viable.
"The moratorium on leasing certainly adds an additional ... block to American energy production, so that is the opposite of what we need to be doing right now," Breyer told Fox Business. "We need to stop the rhetoric that's anti-fossil fuel and we need some clarity just in the regulatory sense that this administration is behind domestic energy production."
The Biden administration instituted a new pause on new oil leases on federal lands and water last month.
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